Sunday, December 22, 2013

Obama conspiracy? George Soros? Overzealous Preppers? Nope. Here are some numbers and the facts behind why you can’t find the cartridges you want.

NRA/American Rifleman (Excerpts) - Trying to explain why there has been a prolonged shortage of ammunition
is like attempting to understand why people line up outside stores in
anticipation of Nike launching its latest basketball shoe or Apple its
latest iPhone. A run on a product—or in this case an entire category of
products—is the result of a perfect storm of factors.

The tax figure is a useful way to understand overall sales trends.
So let’s look at the numbers. In 2000 the U.S. Department of the
Interior reported that excise taxes on ammunition generated $68 million,
whereas in 2012 that figure was $207 million. With inflation taken into
account, that’s approximately a 129 percent increase in 12 years. A lot
of that growth has taken place in the past few years. Between 2007 and
2012 excise tax money generated from ammunition sales almost doubled
from $108 to $207 million. Tax dollars from ammunition sales were stable
from the mid-1990s through 2006, but then started to climb fast as gun
sales began surging.

To understand what $207 million represents, it’s helpful to know that in
2012 the NSSF estimated the size of the consumer rimfire, center-fire
and shotshell market at about 9.5 billion shells and cartridges. That
includes U.S. production in addition to imports minus exports. Last
October the NSSF predicted there would be more than 10 billion
cartridges and shells made for the American consumer market in 2013 as
manufacturers attempt to keep pace with consumer demand.

Can you imagine what would happen if the demand for your other favorite
products doubled in five years? Wouldn’t they likely be more expensive
and harder to find? Also, ammunition production can be difficult to
increase quickly because it takes investment in expensive machinery and
additional personnel to increase production. Making more ammunition also
requires companies to purchase more raw materials in a competitive and
international marketplace.

Some gun owners have been speculating that this supply-and-demand
problem is related to large government purchases. A few people have even
hypothesized that the Obama administration might see reducing the
ammunition supply via massive government buys as a clever way to enact
gun control.

The DHS noted that it
buys in

bulk to save money, but overall its

purchases have actually gone
down.

The DHS is a massive umbrella agency that includes more than 70,000
law-enforcement personnel across multiple agencies and more than 40,000
uniformed members of the military in the U.S. Coast Guard. The
ammunition the DHS buys is used to support law-enforcement operations as
well as routine qualifications and training for U.S. Customs and Border
Protection, the U.S. Secret Service, the Transportation Security
Administration and many other federal entities.

Nevertheless, worries spread in some circles on the Internet when it was
reported that the DHS had a contract for a maximum of 450 million
rounds of .40-cal. jacketed hollow-points to be supplied during the next
five years. Rep. Lynn Westmoreland (R-Ga.) investigated the contract
and published a press release noting that, given all the agencies DHS
buys for, “450 million rounds really isn’t that large of an order.”
Westmoreland’s staff calculated that if the “DHS were to purchase all
450 million rounds over 5 years, then that would equate to only about
1,384 rounds of ammunition” per year per law-enforcement officer.

Some nevertheless wondered why the DHS needs hollow-point ammunition.
The answer, says DHS, is simply that hollow-points are the defensive
ammunition of choice. A little reporting shows this is certainly the
case for federal, state and local law-enforcement officers—as well as
for many private citizens

Sen. Tom Coburn (R-Okla.), meanwhile, asked the DHS for a breakdown of
how much it spends on ammunition per agency and how much it uses
annually (see table, opposite). The answers Coburn received deflated gun
owners’ worries about government malfeasance. The DHS noted that it
buys in bulk to save money, but overall its purchases have actually gone
down. In 2010 the DHS purchased 148,314,825 rounds. In 2011 the DHS
bought 108,664,054 rounds. And in 2012 the DHS purchased 103,178,200
rounds of ammunition.

Ammunition manufacturers back up the DHS’ explanation. For example,
Federal Premium Ammunition, which has 1,400 employees making ammunition
in Anoka, Minn.—some for federal contracts—published a statement saying
that the rumor DHS is “buying excessive quantities of ammunition,
thereby restricting availability to the commercial market,” is a “false
and baseless claim.” Federal Premium says, “The Department of Homeland
Security contract makes up a very small percentage of our total
ammunition output. This contract is not taking ammunition away from
civilians. The current increase in demand is attributed to the civilian
market. Our production volumes on government contracts have been stable
since the mid-2000s.”

Scott Blackwell, president of Freedom Group, an American firearm
manufacturer holding company that includes Remington, Bushmaster and
DPMS, said, “Most of the ammunition we make at Remington goes to the
consumer market. Our supplies, therefore, haven’t been affected by
government contracts. It’s clear to us that any lack of supply in the
marketplace has been from consumer demand for our quality products. To
meet this increased demand we’re investing and growing."

Steve Hornady, president of Hornady Ammunition, told
AmericanRifleman.org: “We’re working as hard as we can to get as much
out as possible … . People walk into the store, they don’t see as much
as they want so they take everything they can get. The next guy who
comes in can’t get anything, so he panics … But there is no government
conspiracy.”

Why Has Demand Gone Up?
There are now more than 5 million women participating in the shooting
sports, an increase of 46.5 percent since 2001, according to the NSSF.
The number of gun owners in America surpassed 100 million a few years
ago and all indicators show it is still growing. More gun owners means
more ammunition being shot. Also, as the most popular firearms being
sold in recent years have been semi-automatic handguns and rifles, it
only makes sense that these gun sales would lead to more ammunition
being purchased and shot.

There are a lot of other numbers tracking the growth of gun sales and
gun ownership that have led to more ammunition sales. For example, July
2013 was the 38th straight month that the number of background checks
called into the National Instant Criminal Background Check System (NICS)
increased when compared to the same month the previous year.

Not every background check results in a sale, but NICS numbers are a
good indicator for overall gun sales. Over the 10-year span from 2002 to
2011 there was a 54.1 percent rise in the number of NICS checks. In
both 2009 and 2010 there were about 9.5 million NICS checks; in 2011 the
number grew to 10.7 million; in 2012 it surged to 13.7 million; and as
of this writing it looked like the number of NICS checks would break the
annual record again in 2013.

You can also see this trend reflected in the number of concealed-carry
permits in the United States. The number of people with concealed-carry
permits has grown from fewer than 1 million in the mid-1980s to 6.8
million by the end of 2012, according to the NSSF. This increase has
certainly resulted in the sale of more handgun ammunition.

It’s worth mentioning one silver lining to this surge in sales as a
parting thought. As previously noted, every time someone buys a box of
ammunition they’re paying a tax. This excise tax must be used for
wildlife conservation projects, gun ranges and other such
outdoor-related programs as mandated by the law. The revenue also must
be sent to the states for these purposes—the federal government can’t
use these funds except for some administrative purposes. So that $207
million raised from ammunition sales in 2012 is benefitting state
wildlife departments, your gun ranges and more.